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Income Tax Officer, Ward 5 (2) , Jaipur Versus Shri K.C. Garg

2015 (10) TMI 1269 - ITAT JAIPUR

Penalty u/s 271(1)(c) - bogus gifts - CIT(A) deleted the penalty - Held that:- The co-ordinate Bench of the Tribunal had decided identical issue in case of late Smt. Kesar Devi Garg wife of assessee wherein the gift of ₹ 10,00,000/- was received from Shri Sanwar Mal Saraff. The quantum addition was also confirmed by the ITAT in case of late Smt. Kesar Devi Garg for A.Y. 2001-02. The penalty under section 271(1)(c) was imposed in that case which has been deleted by the co-ordinate Bench vid .....

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HRI T.R. MEENA, AM For The Revenue : Mrs. Neena Jeph (JCIT) For The Assessee : Shri Anil Goyal (C.A.) ORDER PER: T.R. MEENA, A.M. This is an appeal by the Revenue against the order dated 05.11.2012 passed by the learned CIT (A)-II, Jaipur for A.Y. 2001-02. The sole ground of appeal is against deleting the penalty by ld. CIT (A), imposed under section 271(1)(c) by the AO at ₹ 6,68,116/-. 2. In this case assessment for A.Y. 2001-02 was completed under section 148 read with section 143(3) of .....

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,000/- to the income of the assessee. Penalty proceedings under section 271(1)(c) read with section 274 had been initiated separately for fining inaccurate particulars of income/concealment of income. The AO gave show cause notice on 22.03.2010 to the legal heir of the deceased i.e. assessee Shri K.C. Garg son of late Shri Sua Lal Garg, before imposing penalty under section 271(1)(c) as the addition has been confirmed by the ld. CIT (A) as well as by the ld. CIT (A). Thus the assessee also repli .....

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assessee for all matters concerned. Thus he is liable for penalty for concealment of income to the extent of ₹ 20,00,000/- by introducing bogus gifts and furnishing of inaccurate particulars of income. Accordingly he imposed penalty at ₹ 6,68,116/- under section 271(1)(c) vide order dated 31.03.2010. 3. Being aggrieved by the order of the AO, assessee carried the matter before ld. CIT (A), who had allowed the appeal by observing that the ld. A/R of the assessee submitted that Smt. K .....

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ssions the AO is directed to delete the penalty u/s 271(1)(c) of ₹ 6,68,116/- because on similar facts, on similar gift from the same donor, Hon ble ITAT Bench B , Jaipur deleted the penalty in the case of the wife of the appellant (in the case of Smt. Kesar Devi Garg). Para 5 of Hon ble ITAT order is reproduced below :- 5. We have heard the rival submissions and considered them carefully. After considering the submissions and perusing the material on record, we are of the view that levy o .....

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s, the assessment was completed and the addition was made in the assessment order completed on 12.12.2006. It is seen that the donor who was also expired have filed affidavit in his lifetime that he has gifted a sum of ₹ 10 lakhs. Copy of his capital account showing source of gift and the bank account of the assessee where the amount credited was also filed. Copies of these documents are placed on record. Copy of the order of Tribunal is also placed on record where it has been observed tha .....

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received the same in the garb of gift. Confirmation of gift, source of gift alongwith bank account of the donor and donee were filed. The major details in respect of gift was filed, therefore, as stated above that these details were not sufficient to be a genuine gift, therefore, amount of gift was added. This is not necessary that where any addition has been sustained, penalty is also leviable. There are numerous decisions wherein it has been held that it is not necessary that penalty is levia .....

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be levied just because the additions were sustained. Similar view has been expressed in case of S.L.N. Traders (2012) 341 ITR 235 (Karn) and in case of CIT vs. Oasis Hospitalities P. Ltd. (2011) 333 ITR 119 (Del.). We have also seen that other cases on which reliance has been placed and found that they are also in support of the case of the assessee. In view of these facts and circumstances we are of the view that at least penalty is not allowable on the facts of the present case, accordingly w .....

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are arranged and bogus. The ld. D/R relied upon the Hon ble Punjab & Haryana High Court decision in case of CIT vs. Deep Chand, (2011) 336 ITR 292 (P&H) wherein the Hon ble High Court confirmed the penalty in identical facts and circumstances and held that the gift amounting to ₹ 1,75,000/- said to have been received by the assessee was held to be bogus. Once that was so, the only conclusion was that the assessee had furnished inaccurate particulars of income. The assessee had conc .....

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. 2001-02. On the same facts and circumstances in that case also the addition of quantum had been confirmed by the ITAT. The assessee had submitted copy of Gift Deed, copy of capital account, copy of bank account of the HUF for both the gifts and copy of the bank account where assessee deposited the gift i.e. Union Bank of India. The ITO Ward 2(2) Jaipur on 22.3.2005 had recorded the statement of the donor i.e. Shri Sanwar Mal Saraff who had confirmed the fact that his HUF had given gift to the .....

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gift from the donor. The concealment of income by the assessee had not been proved which is sine quo non for imposition of penalty. The assessee is no more. The penalty imposed on legal heir is defined under section 159 of the IT Act. The legal heir Dr. K.C. Garg does not have any knowledge about the fact. He was practicing as a Doctor for last 25 years in foreign country since 1976. The assessee expired on 26.09.2006 during pendency of the case and the case remained almost unattended. As per ge .....

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